Should I pay of the mortgage.

Litchielou

This is my first post after reading the forum for a couple of months.
My OH is being made redundant in the new year he will get approx 98000, because of his age
he will be able to claim his work pension so no rush to get another job that's if anyone will employ
him at his age.
My question is we have a mortgage of approx 77000 with the redundancy should we pay it off or keep paying a monthly payment (it's on a fixed rate until September 2018 so will incur a penalty) but bearing in mind the redundancy will need to help us get to 2024 when our state pension comes in to effect. We have savings and will inherit some money from our parents as we are both only children.
This is are only debt.
Sorry if this message is confusing but any advice will be gratefully received.

Pixie5740

What's the interest rate on your mortgage?

[Deleted User]

You can't beat the security that owning your home gives you. My advice is pay the mortgage off. It may not incur a penalty if you give them the required notice.

Litchielou

Interest rate is 3.1%.
I want to pay it OH thinks we should save the money as security.

louby40

Why not pay a large chunk off it thus reducing your monthly payments and still giving you some savings for security?

thegreenone

Wow, that's some payoff!!!


Sit down and work out exactly how much money you will need to live on for the next eight years. My heart would be pay off the mortgage but my head says stay in the fixed rate until it's end and then reassess so you don't pay exit fees.


I don't know how old your parents are but don't bank on getting their money. Care fees may swallow it up.

abby1234519

Could you make the maximum overpayment now and then invest the rest of the money. in 2018 you can remortgage but use more of the money to clear it down till you have just got a small mortgage

another_casualty

I would say , pay off mortgage now. Invest the rest.
The early repayment fee would be the least of the worries .
At the end of the day, I'd treat the fee is like 2 or 3 months mortgage payments . I'd pay it off now and get it out of the way.
You have money coming from your parents, and pensions eventually also.

Congratulations , in being in a good position .

When the time is right , you and your other half could claim from the gvt what you are entitled to due to husbands redundancy.
Don't tell them , what you are expecting in the future.
You may not be entitled to anything, due to amount he has received, so you could ignore my last sentence
Bottom line is, you worked for stability in life( like we all do)!, and you could have your own home tomorrow .

Good luck on what you decide

Jenniefour

Litchielou wrote: »

My OH is being made redundant in the new year he will get approx 98000, because of his age
he will be able to claim his work pension so no rush to get another job that's if anyone will employ
him at his age.
My question is we have a mortgage of approx 77000 with the redundancy should we pay it off or keep paying a monthly payment (it's on a fixed rate until September 2018 so will incur a penalty) but bearing in mind the redundancy will need to help us get to 2024 when our state pension comes in to effect. We have savings and will inherit some money from our parents as we are both only children.
This is are only debt.
Sorry if this message is confusing but any advice will be gratefully received.

OP - firstly, do not pay a thing off your mortgage, apart from normal monthly payments until your fixed rate ends, you will be incurring an unnecessary cost by paying the penalty. That's throwing money away. And I'm not sure it would be wise to do it then either. If, for some reason, your OH does not work again 98k is not going to go very far. It works out at 14k a year, best case scenario.

Secondly, I strongly suggest you repost this on the pensions and annuities board. You do not have a debt problem. I think you would benefit from what the folks on that forum have to say - and be prepared to supply more details. E.g. you do not say how much savings you have, whether your mortgage is repayment or interest only, how much your OH's work pensions is p.a., or whether you yourself are working. All these make can make a very big difference to how you use the 98k. 98k for someone who's seriously in debt is a lot of money - but for someone potentially facing 7 years with the loss of at least one income till state pension kicks in, (unless you have a very large amount of savings,) it's not a lot at all.

sourcrates

Some early repayment fees can be quite high, a fair few thousand in many cases.

Why pay it ? I'd wait at least till the current deal ended, then reassess my situation.

badmemory

Firstly look at the maths. How much interest to keep paying the mortgage to the end of the fixed term? How much would the penalty be to pay it off? Will you be able to re-mortgage if you haven't got enough earned income? And if you can what will the likely interest rate be? And finally will your savings be enough with the balance of the redundancy money be enough to see you through to pension age? Bearing in mind you will still need money set aside for emergencies which may be difficult to replace.